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QUAR T ER
2 016
INTERIM REPORT
Q1
L A FA RGEHOLC I M
F I R S T QUA R TER 2 016
As used herein, the terms LafargeHolcim, Holcim or the Group refer to LafargeHolcimLtd
together with the companies included in the scope of consolidation. Holcim Ltd was
renamed to LafargeHolcimLtd following the merger with Lafarge S.A. on July10, 2015.
For the purpose of the proposed merger, the 2014 pro forma information that was included
in the Registration Document registered on May11, 2015 reflected only the effect of the
merger Lafarge/Holcim and its direct consequences (notably the divestments to CRH) as
known at that time. Now with the merger completed, the pro forma financial information
included on pages 3 to 15, in addition to the merger and the latest changes in the scope
ofthe divestments achieved in the context of the merger Lafarge/Holcim, also reflects the
impact of merger, restructuring and other one-offs, the deconsolidation of the A
ustralian
business operated under a joint-venture and the effect of the divestments achieved over
the course of 2014 and 2015.
These figures do not take into consideration any purchase price accounting impact on
operating EBITDA which mainly relates to inventory valuation.
Shareholders Letter
Dear Shareholder,
In the first quarter, which is typically our smallest quarter, we saw solid demand for our
products and a strengthening pricing environment with sequential quarter-on-quarter
improvement of cement average selling prices.
We know that we have more to do to increase momentum in 2016 and we are fully
committed to delivering synergies, strengthening pricing, and maximizing cash flow
generation. We are also well advanced with our divestment program and the proceeds
will reduce our net debt this year.
The first quarter is not indicative of our full year performance. We are on track with our
plan and we see favorable underlying trends. We are confident that 2016 will mark
soundprogress towards reaching our 2018 objectives and we expect to deliver at least
ahigh single digit like-for-like increase in adjusted operating EBITDA for the year.
In the quarter, increases in like-for-like net sales compared with the prior year were
reported in major markets including the United States, Mexico, Algeria, and the Philippines
in what is traditionally the lowest-volume quarter of the year. Cement average selling
prices increased from the fourth quarter 2015 to the first quarter 2016 by 2.1percent,
excluding India, although they remain lower than last year due to price declines in 2015.
Price increases were implemented in two thirds of our markets during the first quarter,
including in Nigeria and India. This will deliver the full effect in the remainder of the year.
The first quarter results were impacted by challenging conditions in a limited number of
markets. Nigeria, Brazil, and India accounted for the majority (CHF 160million) of the
adjusted operating EBITDA declines in the first quarter 2016 versus the previous years
first quarter. However, this was mitigated by timely implementation of synergy action
plans and lower energy costs. China and Indonesia also stabilized as a result of cost management actions implemented in the quarter.
The year-on-year comparison was also impacted by lower prices in Nigeria, India
and China (CHF 170 million compared to the first quarter 2015), lower CO 2 sales
(CHF17million in the first quarter 2015 vsnone in the first quarter 2016), adverse foreign
exchange effects (CHF43million higher in the first quarter 2016 than in the first quarter
2015) and CHF85million of positive items in the previous years first quarter mainly due
to a sales tax credit of CHF20million in India and CHF20million in US pension credits,
with the b
alance dispersed across the regions and countries.
Synergies reached CHF104million in the quarter ensuring that we are on track to exceed
the target of CHF450million of incremental synergies for the full year with the biggest
contributors being: cross-selling of branded products; the optimization of clinker sourcing
between Group companies; and implementation of best practice in our energy mix. Energy
costs were down by over CHF65million (9.0percent) in the quarter as a result of reduced
prices for fossil fuels and procurement initiatives.
LAFARGEHOLCIM
JanMarch
2015
%
like-for-like
Sales of cement
million t
56.6
55.8
+1.4
+1.4
Sales of aggregates
million t
51.6
52.3
1.4
+1.0
million m
12.6
12.4
+1.7
+1.8
Net sales
million
CHF
6,062
6,412
5.5
+0.1
Operating EBITDA
million
CHF
774
917
15.6
10.7
million
CHF
824
1,049
21.5
17.0
12.8
14.3
13.6
16.4
million
CHF
(264)
(273)
+3.2
+1.2
Divestments
As part of the previously announced CHF3.5billion divestment program, the Group has
already secured more than one third of the total and the remainder of the program is
on track.
In April, the Group closed the divestment of Lafarge Halla Cement Corporation in South
Korea to a consortium of private equity funds Glenwood and Baring Asia for a total
consideration of CHF532million.
Shareholders Letter
2016 Outlook
2016 will be a year of progress towards our 2018 targets. Demand in our markets is
expected to grow between 2percent to 4percent, taking into account the challenging
economic headwinds in selected emerging markets that will continue.
This year our strategic plan will gain further momentum and in 2016 we expect:
CAPEX to remain below CHF2.0billion
Incremental synergies of more than CHF450million of operating EBITDA
Our pricing recovery actions and commercial excellence initiatives will demonstrate
tangible results
Net debt expected to decrease to around CHF13.0billion at year end, including the
effect of our planned divestment program
CHF3.5billion divestment program to be completed with more than one third already
secured
We are committed to maintaining a solid investment grade rating and commensurate
tothis rating, returning excess cash to shareholders, notably with a progressive dividend policy.
We reconfirm our commitment to the 2018 targets announced in November2015.
LAFARGEHOLCIM
Asia Pacific
In Asia Pacific, LafargeHolcim benefited from positive performances in Indonesia, the
Philippines, and good volume progress in India driving increased cement sales. Financial
performance was impacted by lower prices in India, some mix-effect in Australia, and
production issues in Malaysia. In China and Indonesia, decisive actions to reduce costs
offset the impact of lower prices and results stabilized compared to last year. In India,
synergies and on-going cost reduction actions have mitigated the adverse price effect.
In addition, the first quarter results 2015 benefited from a positive non-recurring impact
of CHF20million.
Economic growth across Asia Pacific was robust in the first quarter of the year as private
consumption, infrastructure investments, low energy prices, and higher real incomes
drove development in India and as countries such as Indonesia and the Philippines
continued to grow. Chinas economy stabilized in the first quarter of 2016 with more
positive growth in March.
Asia Pacific Pro forma information
JanMarch
2016
JanMarch
2015
%
like-for-like
Sales of cement
million t
30.1
28.2
+6.6
+6.6
Sales of aggregates
million t
7.3
7.8
5.6
+9.2
million m
3.9
3.8
+2.7
+2.7
Net sales
million
CHF
2,148
2,215
3.0
+0.9
Operating EBITDA
million
CHF
340
422
19.4
15.9
million
CHF
344
424
18.9
15.5
15.8
19.0
16.0
19.1
million
CHF
51
(39)
+229.9
+236.9
Demand for building materials in India was solid in the first quarter of the year. As a result,
ACC and Ambuja sold more cement in all regions. Although prices were sharply down in
the quarter, they partially recovered in March with particularly positive trends in the north
of the country and positive margin development as well. In addition, ready-mix concrete
deliveries were up significantly. The Group is rapidly shifting to the more intensive use
of petcoke which led to lower costs in the quarter. Extensive work on logistics and fixed
costs contributed to cost reductions.
Volumes increased significantly in Sri Lanka thanks to ongoing high demand for building
materials. Bangladesh also reported markedly higher cement volumes.
Shareholders Letter
China reported higher cement and aggregates volumes with increased sales volume in
Yunnan province driving the quarter as the Group has increased its commercial efforts.
Competitive pressures remained high in most regions and prices were lower than last
year.
The positive development of construction activity continued in Vietnam in the first
threemonths of the year and cement deliveries were higher than in the previous year.
Ready-mix concrete deliveries however declined.
In Malaysia, cement volumes decreased as a result of production issues in a competitive
environment. Aggregates volumes and ready-mix concrete deliveries were also lower
than in the previous years period as activity linked to large-scale infrastructure projects
was lower.
Construction activity in the Philippines was buoyant in the first quarter thanks to the
ongoing high level of investment in public infrastructure and private residential projects.
As a result, cement volumes increased significantly and prices also developed favorably.
In Indonesia, volumes increased across all three segments in the first three months of
2016 with cement reporting the strongest increase. Cement volumes were driven by
higher demand in Sumatra and clinker exports as the new Tuban plant is ramping up.
LafargeHolcim benefited from lower energy costs and a logistics optimization program
thanks to the Groups broader presence in the country. While the governments commitment to accelerate its economic program stabilized the market, competitive pressure
remained in Java.
Australia benefited from high residential construction activity in some states while the
low level of investments in the mining sector continued to impact demand for building
materials. Aggregates volumes increased in the period, driven by demand in New South
Wales, South-East Queensland, and Victoria, albeit with higher sales volumes of lower
grade materials. Ready-mix concrete deliveries were also up. In New Zealand, where the
shift to an import model for cement continued to progress well, LafargeHolcim sold less
cement but was able to increase aggregates volumes.
Consolidated cement volumes in Asia Pacific increased 6.6percent to 30.1million tonnes
as a result of higher deliveries in India, Indonesia, China, and the Philippines. Aggregates
volumes were up 9.2percent to 7.3million tonnes. Ready-mix concrete deliveries
reached3.9million cubic meters, an increase of 2.7percent mainly thanks to better
volumes in India. Net sales increased 0.9percent like-for-like to CHF2,148million as
better performance in the Philippines, Sri Lanka, and Indonesia offset lower net sales in
Malaysia, India, and China. Adjusted operating EBITDA was down 15.5percent like-for-like
to CHF344million mainly as a result of lower performance in India, Australia, and
Malaysia.
LAFARGEHOLCIM
Europe
Results in Europe declined compared to 2015 pro forma figures, affected by reduced
activity in Russia and Azerbaijan, lower CO2 sales and positive items in the first quarter
2015 of CHF23million. These effects were mitigated by positive trends in Romania and
encouraging resilience in France and Switzerland, although the overall market situation
remained challenging. In response to the challenging conditions, LafargeHolcim has
initiated several cost-containment measures to adapt its operational presence.
The region saw the continuation of moderate economic recovery in the first quarter of 2016
as economic stimuli were felt in a number of markets. Growth in the United Kingdom
slowed and construction market development also lost some of the momentum, while
construction markets in France and Switzerland showed signs of improvement.
Europe Pro forma information
Sales of cement
JanMarch
2016
JanMarch
2015
%
like-for-like
million t
7.7
8.0
3.1
3.1
25.2
25.7
1.8
1.8
4.0
4.0
+0.2
+0.2
Sales of aggregates
million t
million m
Net sales
million
CHF
1,497
1,552
3.6
3.5
Operating EBITDA
million
CHF
105
132
20.4
22.3
million
CHF
119
161
26.4
28.0
7.0
8.5
7.9
10.4
million
CHF
(135)
(197)
+31.7
+29.6
In the United Kingdom, aggregates volumes were lower in the period under review, but
ready-mix concrete shipments increased further, continuing the good performance of
the previous quarters and mainly driven by the strong London market. Cement volumes
increased markedly. Overall price development was positive.
Frances construction sector benefited from mild and relatively dry weather conditions
at the beginning of the year that supported the demand for building materials. As a result,
volumes in cement, aggregates, and ready-mix concrete increased. In February, the Group
initiated a project to maintain a network of high performing and competitive plants. As
part of this intention, the Martres-Tolosane cement plant would be modernized, while
the La Couronne and Le Havre cement plants would be converted into grinding stations.
Shareholders Letter
LAFARGEHOLCIM
10
Latin America
In Latin America, most countries reported good performance with a positive price develop
ment, as LafargeHolcim continued to expand its established retail offering in the region
and also focused on higher value projects. However, performance was impacted by
selected countries, namely the ongoing challenging market environment in Brazil and a
further slowdown in Ecuador.
Economic trends in the region were mixed: While Mexico, Central America, and Colombia
showed good economic and construction activity, demand for building materials in
Brazil remained in a challenging situation as a result of the ongoing economic recession
impacting public and private investment activity.
Latin America Pro forma information
JanMarch
2016
JanMarch
2015
%
like-for-like
Sales of cement
million t
6.0
6.7
10.7
10.7
Sales of aggregates
million t
1.7
1.8
4.4
+0.6
million m
1.7
1.8
6.2
6.2
Net sales
million
CHF
682
809
15.7
1.7
Operating EBITDA
million
CHF
205
253
18.8
10.8
million
CHF
210
255
17.6
9.2
30.1
31.2
30.8
31.5
million
CHF
14
51
72.6
118.0
The Mexican construction industry continued along its upward trajectory that gained
momentum in the previous financial year. Large infrastructure projects led to higher
demand for building materials. LafargeHolcim continued its focus on higher-margin and
higher-value applications. Volumes and prices increased in both cement and ready-mix
concrete.
In Colombia, construction activity was buoyant and LafargeHolcims volumes were stable.
Ready-mix concrete deliveries were higher thanks to the Groups participation in the
Bogota airport expansion. Prices also developed favorably thanks to the focus on retail
customers and higher-margin projects.
Shareholders Letter
Development in Central America was mixed, as Nicaragua and Costa Rica increased
cement volumes, while El Salvador reported lower deliveries as a result of increased
insecurity in the country.
LafargeHolcim sold less cement in Ecuador in the first three months of 2016, as demand
for building materials was lower mainly due to reduced investment in infrastructure,
which resulted from liquidity constraints by the government. Heavy rains also negatively
impacted private construction. Volumes in ready-mix concrete decreased as well.
The very challenging situation in construction markets in Brazil continued during the first
three months of the year, driven by the recession, decreasing consumer confidence, and
political uncertainty. As a result, the government has cut its investments in construction
projects. The Group continued its self-help measures to partly mitigate this effect and
has restructured its ready-mix concrete operations. Volumes in all three segments were
lower than in the previous years period.
In Argentina, the change in government in 2015 resulted in the temporary delay of public
investment. As a result, volumes in cement and ready-mix concrete were lower than in
the previous years period. However, aggregates deliveries grew and overall prices rose,
mitigating some of the volume effects.
Consolidated cement volumes in Latin America declined 10.7percent to 6.0million tonnes
mainly driven by the declines in Brazil and Ecuador. Aggregates deliveries were up
0.6percent to 1.7million tonnes. Shipments in ready-mix concrete totaled 1.7million
cubic meters, a decline of 6.2percent. Net sales declined 1.7percent like-for-like to
CHF682million, again mainly due to Brazil and Ecuador. Adjusted operating EBITDA
decreased 9.2percent like-for-like to CHF210million, as positive pricing development
inseveral markets did not fully compensate for declines in Brazil and Ecuador.
11
LAFARGEHOLCIM
12
JanMarch
2015
%
like-for-like
Sales of cement
million t
10.8
10.5
+3.1
+3.1
Sales of aggregates
million t
3.6
2.4
+45.8
+45.8
million m
1.4
1.3
+10.1
+10.1
Net sales
million
CHF
1,049
1,164
9.9
4.4
Operating EBITDA
million
CHF
252
354
28.9
24.5
million
CHF
256
364
29.8
25.6
24.0
30.4
24.4
31.3
million
CHF
199
250
20.1
18.8
In Egypt, the recovery of demand for building materials experienced in the last quarter
of 2015 continued in the first three months of the year. As a result, LafargeHolcim sold
more aggregates and ready-mix concrete thanks to the Groups involvement in major
infrastructure projects. Cement volumes declined slightly, driven by the Groups margin-
focused strategy.
Algerias construction industry benefited from positive market trends fueled by growing
housing demand and public investment. LafargeHolcim benefited from the high demand
for building materials, which significantly increased cement volumes.
In the first quarter 2016, the construction market in Morocco grew solidly thanks to
positive weather effects. Volumes were higher in all three segments with the strongest
increases reported in aggregates. Pricing also developed positively.
In Lebanon, LafargeHolcim reported significant volume increases in cement and readymix concrete. Jordan also sold more cement. In Iraq, cement volumes increased despite
contraction of construction markets and rainy weather. However, higher energy costs
and a challenging pricing environment negatively impacted the Group company.
Shareholders Letter
While demand for building materials in Nigeria grew significantly in the first quarter of
2016, the competitive environment remained challenging although prices partially
recovered at the end of the quarter. LafargeHolcim sold less cement, mainly as a result
of energy shortages and logistics-related issues earlier in the quarter. The Group con
tinued several actions, including ongoing strict cost management and the optimization
of plant productivity, to be in a position to benefit from the strong market conditions
going forward.
Following good performance in the previous quarter, cement volumes in Kenya were
stable, while Uganda reported contracting deliveries. In Zambia, LafargeHolcim focused
on expanding its offer to retail customers with a new distribution concept, but overall
cement volumes declined. The local company also focused on cost containment measures
to mitigate the challenging market development.
While market trends in South Africa were challenging in the first quarter, LafargeHolcim
increased its cement volumes, with particularly strong deliveries in March as production
limitations at the Groups integrated plant were solved.
Consolidated cement volumes in Middle East Africa increased 3.1percent to 10.8million
tonnes, thanks to higher sales in Algeria, Iraq, and Lebanon. Both other segments reported
strong volume increases: Aggregates shipments were up 45.8percent to 3.6million
tonneswhile ready-mix concrete deliveries increased by 10.1percent to 1.4million cubic
meters. Net sales decreased 4.4percent like-for-like to CHF1,049million as better
performance in the northern African and Middle East markets could not fully offset
negative developments in some sub-Sahara countries. Adjusted operating EBITDA for the
region was down25.6percent like-for-like to CHF256million as a result of pricing declines
in Nigeria and Zambia.
13
LAFARGEHOLCIM
14
North America
LafargeHolcim posted improved results in North America driven by ongoing high demand
for building materials in the United States. Strong pricing and volume trends in the
United States supported a significant increase in financial performance in the region.
Economic growth in the region was driven by positive development in the United States
supported by the vigorous housing market. Infrastructure spending also positively
influenced demand for building materials. Canada showed healthy growth thanks to
exports to the United States, despite the negative effects of lower commodity and oil
prices that impacted investment activity in the western part of the country.
North America Pro forma information
JanMarch
2016
JanMarch
2015
%
like-for-like
Sales of cement
million t
3.4
2.9
+18.9
+18.9
Sales of aggregates
million t
13.7
14.6
5.9
5.9
million m
1.6
1.5
+4.9
+6.0
Net sales
million
CHF
866
776
+11.6
+10.1
Operating EBITDA
million
CHF
(25)
+99.9
+88.4
million
CHF
(26)
+111.4
+100.6
0.0
(3.2)
0.3
(3.3)
million
CHF
(234)
(214)
9.5
4.3
Shareholders Letter
15
In Eastern Canada, LafargeHolcim sold more cement thanks to exports to the United
States and more ready-mix concrete thanks to favorable weather conditions. Aggregates
volumes were down, after strong performance in the first three months of the previous
year. Western Canada remained impacted in the prairies by lower investment as a result
of the oil-price driven economic downturn. Following an exceptionally strong first quarter
2015, volumes were down in all segments for the same period this year.
Consolidated cement volumes in North America increased significantly by 18.9percent
to 3.4million tonnes in the first quarter 2016 thanks to the United States and exports
from Canada to the United States. Aggregates shipments were down 5.9percent
to13.7million tonnes. Good results in the United States drove ready-mix concrete volumes,
which grew 6.0percent and reached 1.6million cubic meters. Net sales increased 10.1percent like-for-like to CHF866million. Adjusted operating EBITDA was positive despite the
strong seasonality that normally generates negative results in the first quarter and
increased significantly to CHF3million.
Eric Olsen
17
Notes
NET SALES
Unaudited
JanuaryMarch
2015
Restated1
unaudited
6,062
3,915
(4,012)
(2,302)
2,050
1,613
(1,339)
(1,040)
(483)
(326)
227
246
Other income
439
Other expenses
(4)
(5)
21
19
Financial income
10
45
24
Financial expenses
11
(270)
(170)
25
554
Income taxes
(88)
(175)
(64)
378
17
(47)
378
(107)
310
60
68
17
12
(0.18)
0.87
12
(0.18)
0.87
12
(0.20)
0.87
12
(0.20)
0.87
0.02
0.02
LAFARGEHOLCIM
18
Million CHF
Notes
JanuaryMarch
2016
Unaudited
JanuaryMarch
2015
Unaudited
(47)
378
(606)
(1,312)
(46)
(6)
(6)
Tax effect
Tax effect
Available-for-sale financial assets
Change in fair value
(17)
Tax effect
Tax effect
SUBTOTAL
(631)
(1,345)
Items that will not be reclassified to the statement of income in future periods
Defined benefit plans
Remeasurements
Tax effect
(227)1
(80)
39
SUBTOTAL
(188)
(73)
(819)
(1,418)
(866)
(1,040)
(877)
(1,028)
11
(12)
Attributable to:
Shareholders of LafargeHolcim Ltd
Non-controlling interest
1
The amount of CHF227million mainly relates to the decrease in the discount rate during the first quarter 2016 in Switzerland and the United Kingdom.
19
31.12.2015
Unaudited
Audited
3,896
4,393
1,730
Accounts receivable
4,383
4,222
3,237
Inventories
2,937
3,060
1,915
867
884
410
Million CHF
Notes
13
31.3.2015
Restated1
unaudited
2,329
772
48
14,413
13,331
7,340
557
770
549
3,080
3,172
1,627
35,009
36,747
19,921
Goodwill
16,688
16,490
6,725
Intangible assets
1,275
1,416
555
803
764
504
687
608
396
58,099
59,967
30,278
TOTAL ASSETS
72,512
73,298
37,618
3,211
3,693
1,845
7,619
6,866
2,113
598
530
3,074
1,548
527
602
170
777
15,720
14,832
6,211
14,381
14,925
9,174
2,150
1,939
920
3,334
3,840
1,263
Long-term provisions
2,095
2,041
991
21,960
22,744
12,349
TOTAL LIABILITIES
37,680
37,577
18,560
Share capital
Capital surplus
Treasury shares
13
572
3,013
1,214
1,214
654
26,436
26,430
7,778
(76)
(86)
(76)
2,928
3,807
8,047
30,501
31,365
16,403
4,331
4,357
2,655
34,833
35,722
19,058
72,512
73,298
37,618
Reserves
TOTAL EQUITY ATTRIBUTABLE TO SHAREHOLDERS
OF LAFARGEHOLCIM LTD
Non-controlling interest
LAFARGEHOLCIM
20
Million CHF
Share
capital
Capital
surplus
Treasury
shares
1,214
26,430
(86)
Payout
Change in treasury shares
10
Share-based remuneration
1,214
26,436
(76)
654
7,776
(82)
Net income
Other comprehensive earnings
TOTAL COMPREHENSIVE EARNINGS
Payout
Change in treasury shares
Share-based remuneration
654
7,778
(76)
21
Retained
earnings
Available-for-sale
reserve
Cash flow
hedging
reserve
Currency
translation
adjustments
Total
reserves
Total equity
attributable to
shareholders of
LafargeHolcim Ltd
Non-controlling
interest
Total
shareholders
equity
14,988
(13)
(10)
(11,158)
3,807
31,365
4,357
35,722
(107)
(107)
60
(47)
(49)
(819)
11
(866)
(28)
(28)
(107)
(188)
(6)
(11)
(564)
(770)
(770)
(295)
(6)
(11)
(564)
(877)
(877)
(4)
(4)
(8)
(6)
14,691
(19)
(21)
(11,722)
2,928
30,501
4,331
34,833
18,439
(14)
(5)
(9,339)
9,082
17,430
2,682
20,112
310
310
67
378
310
(73)
(1,268)
(1,337)
(1,337)
(81)
(1,418)
236
(1,268)
(1,028)
(1,028)
(12)
(1,040)
(47)
(47)
(7)
(7)
(7)
33
25
8,047
16,403
2,655
19,058
18,668
(14)
(10,607)
LAFARGEHOLCIM
22
Notes
(47)
Income taxes
Other income
Other expenses
Unaudited
10, 11
JanuaryMarch
2015
Restated1
unaudited
378
88
175
(6)
(439)
(21)
(19)
225
146
547
325
82
31
(695)
(600)
177
Dividends received
22
24
Interest received
43
17
Interest paid
(274)
(90)
(237)
(154)
(14)
(264)
(214)
(367)
(286)
14
16
(4)
(187)
(23)
256
(131)
(183)
62
93
(449)
(290)
(21)
(31)
912
58
229
789
(677)
(640)
(3)
445
182
(269)
(322)
3,771
1,941
(269)
(322)
(53)
(44)
3,449
1,575
1.Basis of preparation
The unaudited consolidated first quarter interim financial statements of LafargeHolcim,
hereafter interim financial statements, are prepared in accordance with IAS 34 Interim
Financial Reporting. The accounting policies used in the preparation and presentation
of the interim financial statements are consistent with those used in the consolidated
financial statements for the year ended December31, 2015 (hereafter annual financial
statements).
The interim financial statements should be read in conjunction with the annual financial
statements as they provide an update of previously reported information.
Due to rounding, numbers presented throughout this report may not add up precisely
to the totals provided. All ratios and variances are calculated using the underlying amount
rather than the presented rounded amount.
The preparation of interim financial statements requires management to make estimates
and assumptions that affect the reported amounts of revenues, expenses, assets, liabilities
and disclosure of contingent liabilities at the date of the interim financial statements.
Ifin the future such estimates and assumptions, which are based on managements
bestjudgment at the date of the interim financial statements, deviate from the actual
circumstances, the original estimates and assumptions will be modified as appropriate
during the period in which the circumstances change.
23
LAFARGEHOLCIM
24
Acquisition
On January5, 2015, LafargeHolcim acquired control of a group of companies from Cemex
which operate in Western Germany and the Netherlands for a total cash consideration
of CHF210million.
25
4.Seasonality
Demand for cement, aggregates and other construction materials and services is seasonal
because climatic conditions affect the level of activity in the construction sector.
LafargeHolcim usually experiences a reduction in sales during the first and fourth quarters
reflecting the effect of the winter season in its principal markets in Europe and North
America and tends to see an increase in sales in the second and third quarters reflecting
the effect of the summer season. This effect can be particularly pronounced in harsh
winters.
Statement of income
Average exchange rates in CHF
JanuaryMarch
2016
JanuaryMarch
2015
31.12.2015
31.3.2015
1 Euro
EUR
1.10
1.07
1.09
1.08
1.05
1 US Dollar
USD
0.99
0.95
0.96
0.99
0.97
1 British Pound
GBP
1.42
1.44
1.38
1.47
1.44
1 Australian Dollar
AUD
0.72
0.75
0.74
0.72
0.74
BRL
25.52
33.37
26.83
24.99
30.08
1 Canadian Dollar
CAD
0.72
0.77
0.74
0.71
0.76
1 Chinese Renminbi
CNY
0.15
0.15
0.15
0.15
0.16
DZD
0.92
1.03
0.89
0.92
1.00
1 Egyptian Pound
EGP
0.12
0.13
0.11
0.13
0.13
IDR
0.07
0.07
0.07
0.07
0.07
INR
1.47
1.53
1.46
1.50
1.55
MAD
10.12
9.93
10.00
10.00
9.78
MXN
5.51
6.37
5.59
5.69
6.36
1 Malaysian Ringgit
MYR
0.24
0.26
0.25
0.23
0.26
NGN
0.50
0.49
0.49
0.50
0.49
PHP
2.10
2.15
2.10
2.10
2.17
LAFARGEHOLCIM
26
2016
20151
Europe
2016
2015
161.7
161.7
77.8
77.8
30.1
16.7
7.7
4.7
7.3
5.3
25.2
17.4
3.9
2.5
4.0
2.8
2,114
1,598
1,369
991
128
106
1,598
1,497
1,097
Million m
Sales of ready-mix concrete
34
2,148
198
242
(36)
(27)
9.2
15.2
(2.4)
(2.4)
340
335
105
79
15.8
21.0
7.0
7.2
Operating EBITDA
Operating EBITDA margin in %
EBITDA
271
301
86
71
11,111
12,065
12,052
12,246
Total assets2
19,504
19,685
18,095
18,165
7,263
7,260
9,647
9,474
Total liabilities2
Latin America
2016
2015
39.5
6.0
27
North America
2016
2015
2016
2015
39.5
59.8
62.6
32.3
32.3
5.9
10.8
1.8
3.4
2.1
1.7
1.2
3.6
0.3
13.7
1.7
1.5
1.4
0.1
682
707
1,032
122
17
46
682
707
1,049
168
Corporate/Eliminations
2016
20151
(1.5)
(0.5)
Total Group
2016
20151
371.1
374.0
56.6
30.7
5.4
51.6
29.5
1.6
1.0
12.6
8.0
866
496
6,062
3,915
(179)
(151)
866
496
(179)
(151)
6,062
3,915
(155)
(118)
227
246
3.7
6.3
156
187
188
32
(123)
(71)
22.9
26.5
17.9
19.3
(14.2)
(14.3)
205
231
252
45
(4)
30.1
32.8
24.0
26.9
0.0
(0.8)
(128)
(116)
774
571
12.8
14.6
180
199
229
41
(29)
(11)
69
427
806
1,028
3,730
3,694
9,265
9,523
11,866
12,064
230
177
48,254
49,770
5,056
5,096
12,682
12,512
15,010
15,364
2,165
2,475
72,512
73,298
3,590
3,497
4,683
4,632
6,183
6,359
6,3133
6,3543
37,680
37,577
LAFARGEHOLCIM
28
Reconciling measures of profit and loss to the consolidated statement of income of LafargeHolcim
Million CHF
Notes
JanuaryMarch
2016
(Unaudited)
JanuaryMarch
20151
(Unaudited)
OPERATING PROFIT
227
246
547
325
OPERATING EBITDA
774
571
Other income
439
(4)
(4)
21
19
10
EBITDA
10
806
1,028
(547)
(325)
(1)
10
35
22
Financial expenses
11
(270)
(170)
25
554
Cement1
JanuaryMarch (Unaudited)
2016
20152
Aggregates
2016
20152
515
296
4,026
2,471
257
166
236
181
4,283
2,637
750
477
1,742
1,250
114
105
of which Europe
619
388
396
288
582
611
12
10
937
159
26
465
253
203
70
of which Corporate/Eliminations
(62)
(23)
OPERATING EBITDA
817
543
20
27
325
296
13
24
57
35
42
32
193
220
242
48
(1)
51
32
(24)
(13)
of which Europe
(52)
(87)
(12)
(15)
19.1
20.6
2.7
5.8
38,600
39,635
5,889
6,391
29
1,522
20152
Corporate/Eliminations
2016
20152
1,148
Total Group
2016
20152
6,062
3,915
6,062
3,915
141
144
(635)
(491)
1,663
1,292
(635)
(491)
381
311
(89)
(69)
2,148
1,598
707
592
(225)
(171)
1,497
1,097
138
139
(50)
(53)
682
707
136
12
(50)
(6)
1,049
168
288
225
(90)
(52)
866
496
(131)
(140)
14
13
(179)
(151)
(63)
774
571
16
340
335
13
105
79
231
12
10
205
(2)
252
45
(27)
(22)
(4)
(64)
(14)
(128)
(116)
(3.8)
0.1
12.8
14.6
3,765
3,743
48,254
49,770
LAFARGEHOLCIM
30
8.Other income
Million CHF
JanMarch
2016
JanMarch
20151
439
439
In 2015, the position Net gain on disposal before taxes mainly included:
a gain before taxes on the disposal of LafargeHolcims entire remaining stake in
Siam City Cement Public Company Limited of CHF371million and
a gain before taxes on the disposal of Holcim (esko) a.s. and LafargeHolcims
Gador cement plant and Yeles grinding station in Spain to Cemex of CHF61million.
Additional information is disclosed in note 3.3.
9.Other expenses
Million CHF
JanMarch
2016
JanMarch
20151
(1)
Other
(4)
(4)
(4)
(5)
10.Financial income
Million CHF
JanMarch
2016
35
JanMarch
20151
22
10
TOTAL
45
24
The position Other financial income relates primarily to interest income from loans
and receivables.
31
11.Financial expenses
Million CHF
Interest expenses
Fair value changes on financial instruments
Unwinding of discount on provisions
JanMarch
2016
JanMarch
20151
(209)
(126)
(1)
(1)
(7)
(4)
(13)
(4)
(27)
(13)
(20)
(42)
19
(270)
(170)
The positions Interest expenses and Other financial expenses relate primarily to financial liabilities measured at amortized cost, including amortization on bonds and private
placements.
The position Financial expenses capitalized comprises interest expenditures on largescale projects during the reporting period.
LAFARGEHOLCIM
32
Million CHF
31.3.2016
31.12.2015
25
Inventories
94
195
1,790
772
47
178
2,329
772
Current liabilities
289
396
92
777
1,552
772
33
Million CHF
31.3.2016
Fair value
level 1
Fair value
level 2
Total
106
108
Others
33
33
30
30
61
61
73
73
Fair value
level 1
Fair value
level 2
Total
114
117
Others
52
52
80
80
83
83
26
26
Financial assets
Available-for-sale financial assets
Financial liabilities
Million CHF
31.12.2015
Financial assets
Available-for-sale financial assets
Financial liabilities
LAFARGEHOLCIM
34
15.Bonds
On March 23, 2016, Lafarge S.A. redeemed CHF 364 million relating to a EUR 332 million
bond with a coupon of 4.25 percent which was issued on November 23, 2005.
17.Other information
As mentioned in the media release dated March17, 2016, the Group signed an agreement with SNI, its historical partner in Morocco, to enlarge its joint venture by merging
Lafarge Ciments and Holcim (Maroc) S.A. The transaction which would result in loss
ofcontrol of Holcim (Maroc) S.A. is expected to close in the third quarter of 2016 and
issubject to relevant regulatory authorities approval, customary closing conditions and
the approval of the shareholders of Lafarge Ciments and Holcim (Maroc) S.A. to merge
the two companies. As the criteria in IFRS 5 Non-current Assets Held for Sale and
Discontinued Operations have not yet been met, Holcim (Maroc) S.A. has not been classified
as held forsale.
35
in EUR million
Fixed-rate tranche
Amount
Fixed-rate tranche
Interest rate
Floating-rate tranche
Amount
Floating-rate tranche
Interest rate
5 years
7 years
10 years
413
152
32.5
1.04%
1.46%
2.00%
209
25
6m-euribor
+1.0%
6m-euribor
+1.2%
On May11, 2016, LafargeHolcim International Finance Ltd issued Schuldschein loans in the
total amount of USD201million, guaranteed by LafargeHolcimLtd and with the following
characteristics. The proceeds will be used for general corporate purposes.
in USD million
5 years
Fixed-rate tranche
Amount
Fixed-rate tranche
Interest rate
Floating-rate tranche
Amount
Floating-rate tranche
Interest rate
7 years
40
15
2.80%
3.20%
121
25
3m-libor
+1.6%
3m-libor
+1.8%
LAFARGEHOLCIM
36
2016
20151
million t
371.1
374.02
0.8
Sales of cement
million t
56.6
30.7
+84.2
million t
2.0
0.7
+194.2
Sales of aggregates
million t
51.6
29.5
+74.6
million m
12.6
8.0
+56.9
Sales of asphalt
million t
1.5
1.6
7.3
Net sales
million CHF
6,062
3,915
+54.8
Operating EBITDA
million CHF
774
571
+35.4
12.8
14.6
227
246
Operating profit
million CHF
7.9
3.7
6.3
EBITDA
million CHF
806
1,028
21.6
112.4
million CHF
(47)
378
(0.8)
9.7
million CHF
(107)
310
134.6
23.6
million CHF
(264)
(214)
(4.4)
(5.5)
million CHF
18,041
17,2662
+4.5
million CHF
34,833
35,7222
2.5
CHF
CHF
million USD
6,107
(0.18)
0.87
120.7
(0.18)
0.874
120.7
4,107
+48.7
Operating EBITDA
million USD
780
599
+30.1
Operating profit
million USD
229
258
11.5
133.2
million USD
(108)
325
million USD
(266)
(224)
18.7
million USD
18,699
17,447
million USD
36,104
36,0972
+0.0
USD
(0.18)
0.914
119.8
Net sales
million EUR
5,532
3,646
+51.7
Operating EBITDA
million EUR
706
532
+32.7
+7.2
Operating profit
million EUR
207
229
9.7
million EUR
(98)
289
133.9
million EUR
(241)
(199)
21.2
million EUR
16,507
15,976
million EUR
31,871
33,0532
EUR
(0.16)
0.81
+3.3
3.6
119.8
37
LafargeHolcim securities
The LafargeHolcim shares (security code number 12214059) are traded on the Main
Standard of the SIX Swiss Exchange in Zurich and on Euronext in Paris. Telekurs lists
the registered share under LHN and the corresponding code under Bloomberg is
LHN:VX. The market capitalization of LafargeHolcimLtd amounted to CHF27.4billion
as at March31, 2016.
August 5, 2016
LafargeHolcimLtd
Zrcherstrasse 156
CH-8645 Jona/Switzerland
Phone +41 58 858 86 00
communications@lafargeholcim.com
www.lafargeholcim.com
2016 LafargeHolcimLtd